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Tuesday, July 9, 2013

Gasland 2 And The Dimock Water Line: The Real Story

Airing last night on HBO, Gasland 2 focuses considerably on pollution of 18 water wells in Dimock, Pennsylvania by methane and the proposed extension of a water line to the families whose water was contaminated by Cabot Oil and Gas. Josh Fox and I agree that mistakes in gas drilling by Cabot caused methane to pollute the water wells of 18 families, but you won't see the real story of the proposed water line to serve those 18 families in Gasland 2 or what DEP did from 2008 to 2011. See also:http://johnhanger.blogspot.com/2013/07/gasland-2-pa-regulatory-story-not-told.html.

Here is what really happened in the fight with Cabot to clean up the groundwater and to build a proposed water line from Montrose to Dimock.

To recap, Cabot made mistakes in gas drilling that caused methane to pollute 18 water wells in Dimock, Pennsylvania. That conclusion was established by an extensive investigation done by the Pennsylvania Department of Environmental Protection under my leadership.

Methane in water is not toxic but can be explosive once concentrations reach high enough levels. In short, it can be dangerous, even deadly. Indeed, one of the 18 water wells did explode in January 2009. To repeat the problem in Dimock was methane, not fracking fluids, and methane in water at high concentrations is a serious problem that can be dangerous and certainly can make a home worthless.

To make a long story shorter, by the Spring of 2010, I was completely unsatisfied with Cabot's response to the pollution of 18 water wells and its efforts to remedy the problem for the affected families. As a result, I concluded a Consent Order with Cabot that had many provisions. For example, the Consent Order included not issuing for a period any new drilling permits to Cabot statewide; stopping Cabot from drilling and hydraulic fracturing in the Dimock area; requiring Cabot to plug or repair gas wells to stop the source of the methane migration; install machines at each of the 18 water wells to get methane out of the water; to provide water deliveries to the 18 families impacted; and substantial fines that eventually added up to more than $1 million. The order cumulatively would cost Cabot many millions of dollars in fines, lost investment, and lost revenues of gas that would not be produced.

The Pennsylvania Department of Environmental Protection also was testing regularly the affected families water, and methane levels were still too high in most of the 18 water wells by the summer of 2010. I was determined to do everything that I could to clean the groundwater and to restore good water to the 18 families. As a result, knowing that in a few past cases of industrial pollution of groundwater, the Pennsylvania Department of Environmental Protection and the state had extended water lines to affected families, I put on the table doing the same for the 18 affected families in Dimock.

Cabot, however, refused to agree to pay for the extension of the water line from Montrose to the Dimock area that would cost $12 million. After discussing the water line, Cabot's opposition to it, Pennsylvania paying up front for the water line, and then suing Cabot to recover the money with Governor Rendell and his Chief of Staff, Steven Crawford, I was authorized to move ahead with building the water line, even though there was no guarantee that the state would prevail in litigation to recover from Cabot the $12 million needed to build the water line. This was a bold, strong but difficult attempt to remedy the impact on the 18 families.

Without Cabot agreeing to pay and without a court order for it to pay for the water line, the initial financing would come from a separate state agency called Pennvest that had its own board on which I served as Vice-Chairman. Importantly, the Pennvest board was not unanimous in support of the project, with powerful Republican state senators on it opposed to building the water line and other board members conditionally supportive. Pennsylvania American Water Company that provided public water in Montrose, however, agreed to build the water line from Montrose to the affected families, if financing was made available.

By September 2010, I announced in a public meeting in Dimock that the water line would be built. Soon after that announcement, massive local opposition to the water line erupted and was partly the result of Cabot encouraging the opposition. For example, one evening to reach the home of one of the 18 families whose water had been polluted by Cabot, I walked through a protest of more than 100 people outside the home who were opposing the extension of the water line and who were supporting Cabot. That was quite a night for another reason: It ended after midnight with a deer totaling my car, as I drove 3 hours back to my home in Hershey.

When the sun came up the next morning, I knew that the local opposition itself could well stop the water line. Another threat to the water line was Republican legislative and local opposition to it and the looming election for Governor.

In November 2010, Republican Tom Corbett won the Governor's seat, and he had run openly as an unequivocal proponent of gas drilling and as friend of the gas industry. The combination of strong local opposition, Republican legislative opposition, and the election of Tom Corbett meant that the water line was not going to be built. Elections have consequences.

The water line would be dead as soon as Governor Rendell and I left office, and Tom Corbett took office in January 2011. Also though the change in the Governor's chair sealed the water line's fate, a further blow to the water line came after the November 2010 election in the form of good news.

The plugging and repairing of gas wells was working to lower methane levels in the groundwater in the area. Fourteen of the 18 water wells had methane levels reduced below the "action level" in testing that came back after the election. This was good news for which a lot of people had worked hard to make happen. But it also meant that only 4 families had a water supply with too much methane in it and that further weakened the case for building a water line from Montrose.

After the November 2010 election, I had a choice to make about the 18 families and Cabot's pollution of their water. I could do nothing more and leave. Taking that option would likely have kept me out of Gasland 2 and that would likely have pleased by mother. Yet, throwing in the towel would have meant stopping fighting for the 18 families who had been harmed and would have meant Cabot paid no compensation to them.

After the November election, instead of throwing in the towel, I could try Plan B.

Plan B was an attempt to hold Cabot financially responsible by winning a payment from Cabot that would go to the 18 families, in addition to requiring Cabot to keep working to get the methane out of the groundwater that supplied all 18 families. The Pennsylvania Department of Environmental Protection concluded in December 2010 a new consent order with Cabot that required continued work to remove methane from gas wells that leaked into groundwater in Dimock, that prohibited Cabot from restarting gas drilling or fracking in the Dimock area, pay more fines, and pay a total of $4.1 million into 18 separate escrow accounts for the impacted families.

The escrow payments averaged $201,000 and were calculated to be twice the property value of the home affected. Escrow payments would be required even for the 14 properties where testing showed methane had been reduced to safe levels. Importantly, the Consent Order stated that payments would be made without requiring any family to drop other litigation or sign a confidentiality agreement. This order bound only Cabot and the Pennsylvania Department of Environmental Protection and did not bind the families who again were free to continuing litigating and speaking.

It was important to establish that a drilling company who pollutes a water well must pay twice the property value of the home, even if subsequent clean up efforts of the water succeed. Two times the property value served both the needs to compensate and punish. The principle of paying twice the property value, even if pollution is removed, is important and should become statutory law.

One of the tragedies in Dimock is the discord within the community over gas drilling. That discord extended to the 18 families which divided into two groups--11 families retained private counsel and sued Cabot, but 7 families did not sue. In my book, they had all suffered contamination as a result of mistakes made by Cabot and had experienced tremendous stress. After I left office in January 2011, I was told that 7 of the families who had not sued Cabot did take money from the individual escrow accounts but the 11 who did sue Cabot did not.

Gasland 2, however, wrongly states that none of the 18 families took the escrow money. Some of the families certainly did and wrote and called to thank me. Gasland 2 also does not mention the number $4.1 million that was placed into escrow accounts.

Those payments and the principle that gas drilling companies who pollute water wells pay twice the property value, even if clean up works, are the strongest financial remedies ever won by a regulatory agency for shale gas pollution. They come on top of requiring Cabot to plug gas wells to clean up and that destroyed millions of dollars of its investments and prevented receipt of millions more in revenues from selling the gas. They come on top of requiring Cabot to pay $1.3 million in fines, install machines to remove methane, and to deliver water to impacted families.

I am proud of the investigation that the Pennsylvania Department of Environmental Protection did that established methane from mistakes in gas drilling contaminated 18 water wells. I regret greatly that some in the gas industry continue to say nothing happened at Dimock. That is completely false.

I am also proud of the fight that I led to get the methane out of the water in the Dimock area. Methane was reduced to safe levels at 14 of the 18 water wells by December 2010. I am also proud of the fight I led against Cabot to try and build a water line even though that failed. I am also proud of the fight that I led to make Cabot pay twice the property value and to compensate families whose water was polluted.

Finally, for all the reasons stated above, the fight to build a water line became impossible by the time of the election of Tom Corbett in November 2010. That is the real story of the proposed water line in Dimock.

25 comments:

John, the water line came up again at the Montrose school board meeting. There was a guy from the Progress Authority at the Choconut Elem meeting for the Montrose school district last night. He was asking them to sign agreements concerning the Keystone Opportunity Zone for the ole Bendix property and some acreage adjacent to it owned by Adam Diaz. They want to redevelop it and start some sort of profitable business there. They were asking for a resolution to be made by the board authorizing exemptions,deductions, abatements and credits for real property, EIT, net profits, mercantile and business privilege taxes within the Bendix area, designated as a proposed Keystone Opportunity Expansion Zone, in order "to foster economic opportunities, stimulate industrial, commercial, and residential improvements, and prevent physical and infrastructure deterioration..." The discussion also included a plan with the PA American Water Co. to run a water line to South Montrose. I asked if there were any possibility of extending the line to Dimock, as previously planned. He said, "Absolutely."

Also, the Susquehanna county jail needs more water, due to the increase in occupancy. The Bendix site still has properties with treatment systems for the TCE and the two break down chemicals since the pit where the lubrication oils were dumped contaminated the aquifer through the fault line near the old railroad bed. The last five year review was done last year for the site by the EPA. This site also has an industrial waste water treatment plant with a permit. That could be upgraded.

No. After I left DEP, I joined a law firm. My work included suing the drilling company Range Resources that is highlighted in the movie, defending the proposed EPA Air Toxic rules (I testified to Congress in support of the rules), representing Pennsylvania's largest wind developer, working for solar companies to build solar generation, and writing a green economic development plan for Harrisburg. I also worked to create the Institute for Gas Drilling Excellence that became the Center For Sustainable Shale Development (www.sustainableshale.org) and believe it is important for the industry to improve its safety and to reduce its environmental impacts. I led until November 2012 the collaboration effort that became the Center for Sustainable Shale Development that included 4 gas drilling companies, 6 environmental groups, and 2 Foundations (Heinz and William Penn) to work on writing standards for safer drilling. The law firm that I have an association with has a membership in the Marcellus Shale Coalition and that was what the movie referenced. Of course, what really matters is what I did in office. As DEP Secretary, I more than doubled the gas drilling oversight staff, growing it from 88 to 210. With Secretary Quigley, I wrote the moratorium on further drilling in the state forests. I passed 5 much stronger regulations of the gas drilling industry, involving water withdrawals, waste water disposal, drilling standards like cementing and casing, mandatory disclosure of chemicals used in fracking, and buffers for streams from all types of development. When I was in charge of enforcement, DEP issued 1200 violations to the gas industry in just 2010. I raised the drilling fee charged at the time of permit application from a ridiculous $100 to on average $3,000. I went to war against Cabot as is described above. I shutdown EOG for more than 30 days when it had a blowout. I was the toughest regulator of the gas industry in America. I also fought hard for a real gas drilling tax and the Pennsylvania House then controlled by Democrats passed it twice in 2010 but it never even got a vote in the Republican controlled Senate. But I have not and will not pander to anyone by telling them that the falsehood natural gas is worse for the environment than coal and oil. Natural gas is industrial activity and must be strongly regulated and reasonably taxed. But, as just one example, breathing soot kills 34,000 people in the US each year, according to the EPA. All that soot comes from burning coal and oil (with a bit from biomass). Natural gas emits zero soot when burned. The single biggest public health impact from our energy choices is the enormous number of deaths and illness caused by soot.

PA DEP under my leadership fought Cabot tooth and nail through December 2010. I take pride in that because Cabot polluted the water with methane and would not fix the problem without a fight. Thanks to the tough action taken by me, Fourteen of 18 water wells had methane reduced to safe levels by December 2010. Four still had unsafe levels at that point so I don't dismiss your comment. Requiring plugging and repairing gas wells cost Cabot tens of millions in lost revenue, lost investment, and other costs. $4.1 million put in escrow accounts for 18 families as a result of a regulatory agency action is still unprecedented.

Mr Hanger,I've seen you repeatedly state the escrow account was twice the property value of the affected homes. It has been reported it was twice the assessed value of the homes. In Susquehanna County, the assessment is 1/2 of the market value (on paper - in practice it's probably closer to 1/3 of the market value). Big Difference there... It seems a bit misleading and would like to hear your take on it.

We insisted that the consent order be based on the market value of the home prior to contamination. I believe strongly that drilling companies must pay twice the market value of a home, even when the pollution is remedied, and even when a property owner keeps the home and his or her mineral rights. I would like Pennsylvania and every state to make that law. By December 2010, 14 of the 18 homes had methane reduced to levels below the action level. But all the homeowners suffered tremendous stress and inconvenience. The amount paid should not just compensate but also punish. It should send the message that a company must operate better next time.

Do you ever go out and give presentations about what happened in Dimock and what the Pennsylvania DEQ did under your watch? It seems like Mr. Fox wants to demonize everyone.Ron Hensley/Central States Air Resource Agencies Assn.

Yes. Invitations are welcome. I will also post an article describing what the PA DEP did from September 2008 to January 2011, when I was Secretary. Short version is that we increased the drilling oversight staff from 88 to 210, passed 5 new, strong gas drilling regulations, and issued 1200 violations to the industry in just 2010. Stay tuned for more.

I just saw the movie "Gasland II" today and was pretty shocked by what I saw. Afterwards, I went online, Googled the movie name and came across your blog. Thanks for explaining what happened in Dimock and thanks even more for your hard work towards the much needed regulation of this industry. However, since all state regulators and governors have different priorities, it appears to me that fracking regulation will continue to vary greatly from state to state.

Your story is enlightening yet troubling. It exemplifies what's possible with exceptional commitment, persaverence and most importantly political will. But as we all know, this is the exception rather than the rule. It also recounts a 2 year plus protracted battle to right the wrongs of one drilling company in one city for 18 wells (still not entirely finalized 4 years later). How many fracking wells are there currently in the United States? How many fracking companies are there in how many cities? Your story is impressive, but what about all the towns that don't have the same legal recourse? What about all the politicians who see revenue dollars before public safety? In the big scheme of things, is fracking really a safe practice?

I still have a few unanswered questions from the movie...and since you've taken on a new role in the "sustainable shale" movement, I'd like to run them by you:

1. The professor in the movie stated that about 20% or 1/5th of all wells will have a concrete failure initially and up to 50% (I believe) over the course of 30 years. This sounds entirely plausible given the nature of concrete. But even if that number is cut down to a fraction of what it is today by better technology, we are still talking about thousands upon thousands of faulty wells across the country which may not only leak methane, but toxic fracking chemicals into water tables in a virtually irreversible manner. How would we not only prevent such failures, but clean up water after it has been contaminated--if that's even possible.

2. Methane, we heard, is a more damaging greenhouse gas than CO2 by far. How do we prevent seepage (and further global warming) in an industry of this scale.

3. Most importantly, no matter how clean this industry becomes how will there ever be any safeguard against triggering an earthquake on a major fault line with economic consequences in the billions of dollars to our government(s) not to mention the large scale loss of life.

These are tough questions, so I have to ask myself just how sustainable can the oil fracking industry be?

First I support as the best energy choices energy efficiency and renewable energy, even though the two biggest forms of renewable energy are corn ethanol and hydro and both have significant environmental impacts. Only renewables and energy efficiency are "sustainable" in the sense that most people and I use that word.

To your questions, with due respect to the professor in the movie, be careful. I think the data in the movie is first from offshore wells and was not a failure number but an over pressure number. Second, the US has had more than a million oil and gas wells drilled and cemented over many, many decades. At this point, there is little to no empirical record of oil and gas wells leaking fluids. If they were leaking fluids even at a modest rate, hundreds of thousands of water wells would have been destroyed decades even before the first shale wells were drilled around 2,000. Such a massive contamination of water would have been a major national story long ago if it were happening.Gas wells must be plugged at the end of their useful life that ranges from short periods to 40 or 50 years typically (longer in some more unusual cases).

Methane is a more potent heat trapping gas when it is in the atmosphere, but it breaks down and stops trapping gas within 15 or less years. Carbon dioxide persists and traps heat for more than 100 years. So all the methane in the atmosphere today will be gone in 15. That's far from true with carbon dioxide. Methane can be reduced by green completions and many other good practices. The EPA has passed a rule requiring green completions in 2014 but of course Gasland 2 does not say that. That rule will cut emissions by up to 90% and Dr. Howarth himself (in the movie) has said that the EPA rule will substantially manage the issue. The EPA has said that the methane leakage before the rule is now considerably below 2% and is falling. By the way, there are 6 separate studies that refute Dr. Howarth's calculations. Those 6 studies all found that coal on a life cycle basis emits twice the carbon as natural gas. There is no contest that coal and diesel emits soot, while gas does not, and that soot kills 2 million people globally each year and 34,000 in the US per year.

The US has 144,000 underground storage sites for fluids that come from oil, gas, and many other industries. Storing liquids underground can cause earthquakes (see the blog post on a recent study). Geothermal and coal mining too can cause the small earthquakes associated with underground storage. Much better siting regulations of all these practices need to be put in place. The goal must be to keep them away from certain geological places and large faults.

All our traditional energy choices are ugly. Coal and diesel burning emits soot, mercury, lead, arsenic, sulfur dioxide, nitrogen dioxide, and most of the heat trapping pollution. Nuclear creates the most toxic waste stream in the world and we have no place to store it other than piling it up at the nuclear plants. Plus 1% of the nuclear reactors built globally have melted down. Corn ethanol and hydro are the largest renewable energy sources and both have big environmental impacts. Coal has the most environmental impacts, oil is second, gas third but that depends on how one ranks nuclear.

So methane breaks down in 15 years, while CO2 requires 100 years. And you said it like, "That's OK! It's perfectly alright to dump as much methane into the atmosphere as you can!" I know you didn't exactly say that, but it sounded like that.

Considering that this shale fracking business would go on (and intensify!) for AT LEAST 50+ years into the future, we are probably looking forward to at least 50+15 years worth of continually-replenishing methane blanket in our atmosphere.

Btw, when you say we have no means of securing truly "clean" energy with minimal environmental impact, it seems that you have forgotten wind and solar resources? Or not? What is the truth on wind and solar based energy: are we able to produce enough of it for everyone?

The EPA rule requiring green completions that cuts methane emissions by up to 90% goes into effect in 2014. Green completions now take place on about 50% of shale wells. Rules and efforts to cut methane leakage are increasing and methane leakage rates are below 2%, according to the EPA. They need to go lower and can go lower. Nobody has done more for renewables in PA than me. I have supported more than 20 wind farms in PA that are now operating and have often been attacked by those who have them due to bird or bat kills or view impacts. I created the PA Sunshine program that built 6,000 solar projects. My campaign if successful will double again PA's renewable energy production. Each day we get enough wind or sun to run the world on it. The whole problem is cost. Why do so view people still have solar on their roof? Cost and night time. There are limits. California is the most aggressive state in deploying renewables. It will get to 33% of its ELECTRICITY coming from renewables by 2020. That's great. But where does the other 67% of its electricity come from? And remember that 95% of our transportation fuel comes from OIL. Renewable energy will do incredibly well to supply 15% to 20% of America's total energy by 2020. And so where does the other 80% come from? Coal, oil, nuclear, and gas. And it is just not true to say that gas is worse than coal or oil. Soot from burning coal and oil kills 34,000 Americans each year and 2 million people globally. Gas emits no soot. No mercury, arsenic or lead--all of which comes from coal. We must strongly regulate gas and accelerate renewables and energy efficiency.

You are very optimistic outwardly and it's only because you know that your career aspirations depends on your ability to sell your optimism. But, then there's another side of you that's perfectly aware that no matter what you do, we will still be dependent on mostly coal, oil, nuclear, gas which are either running out of supply or unsafe for the environments and us, and the only solution is to drastically cut down energy consumption. And that means rapidly reducing human population. Now which ambitious politician wants to sell this uncomfortable truth to the public?

Why has no one spoken about the obscene amount of fresh water used to frack a well, then this water is driven back underground never to see the light of day again? This water will never evaporate and come back as rain in the proper cycle. How can anyone believe this is good for our environment? What about storage ponds, vast amounts of trucking (diesel emitting), blow off of methane and noxious smells, etc from the well sites, these all leave scars on the landscape. How is this a good thing?

It's not a good thing. Nor is blowing up mountains to mine coal and burying streams with spoil. Nor is storing the most lethal waste stream ever created--nuclear waste--at nuclear plants because no permanent storage site exists. Nor is burning coal and diesel that kills 34,000 Americans with soot and 2 million people globally every year. Nothing kills more people than soot from coal and diesel, while gas emits no soot. I can go on. Our energy choices are ugly. Strong regulation is needed of all of them. Outdoor storage ponds for waste water should be banned for example. We also must accelerate deployment of energy efficiency and renewable energy.

This is exactly what is wrong with our country. A big gas company ruins the homes and lives of modestly living individuals and the solution is to make them pay. What they paid was a drop in the bucket and most likely had little to no affect on their bottom line. So these families got twice the market value of the homes they had no intentions of selling. Can you even put a price tag on the emotional ties to ones home? Ones connection to their community. Yet Cabot continues to make money hand over fist without any real consequence for what they have done. We put such little value on human life in comparison to the all mighty dollar.

I agree that corporate misbehavior too often is not punished strongly enough. In this case, by December 2010, the methane had been reduced to safe levels in 14 of 18 cases. Many of the 18 still live in their homes. They still have their mineral assets.

It is never fully explained why there was "massive local opposition" to the Dimock water line. You state it was due to encouragement from Cabot but this just doesn't make any sense and nowhere do you elaborate on why local opposition would have emerged so soon after there was such vocal discontent about the contaminated wells. The day old fish is beginning to stink!

Fox noted the large local opposition to the water line in the movie. He said cabot stirred the opposition by saying taxpayers would pay for the line. I think that was part of the reason why most people in the county opposed the line. Of course the plan was to pay for the line upfront with public funds and sue cabot for them. Cabot also had a lot of support because it was delivering lease and royalty money and creating jobs. Most people in the county support gas drilling.

I do not see any mention of free energy systems in this article, nor other articles which discuss natural gas or fossil fuel technology. Yet intelligent and reputable scientists have been working on these methods of extracting energy for well over a century. But they have been systematically repressed and sabotaged in their efforts by those who wish to keep the status quo for reasons of money, power and greed. I have been fascinated to read articles and see videos on the subject, and look forward with anticipation to reading Tom Bearden's book, "Energy from the Vacuum" which I have just ordered. Sooner or later we will have to invest in other then Industrial Revolution technology with all its pollution and destruction of the environment. I pray that that happens before we have so polluted the earth and air of our beautiful planet that neither we nor the planet will survive. ".... In the interests of science it is necessary over and over again to engage in the critique of these fundamental concepts, in order that we may not unconsciously be ruled by them." (Albert Einstein)

About Me

I am an expert on energy, environment, green economy, competitive electric markets, and utility regulation with unique experience in and out of government. I am a Democratic candidate for Governor of PA. See www.hangerforgovernor.com. You can email me at john@hangerforgovernor.com. I have been both the Secretary of the Pennsylvania Department of Environmental Protection and Commissioner of the Pennsylvania Public Utility Commission. I have made leading regulatory decisions, testified to Congress and state legislatures, and been interviewed countless times, appearing on CBS evening News, NBC Evening New, CNN, BBC, CBC, and many more outlets. I am a 1984 graduate of the University of Pennsylvania and 1979 graduate of Duke University.